Households will experience the biggest fall in their living standards since records began as they face soaring inflation, tax increases and rising energy bills. In a bleak assessment of the year ahead, the Bank of England warned people that take-home pay would fall by five times the amount it did during the financial crisis of 2008. It will be the worst hit to real incomes since comparable records began in 1990.
Britons facing biggest drop in living standards – The Times
It’s a ticking time bomb and it is among us as we go about our daily lives. The warning signs are increasing daily and we ignore it at our peril. It is the result of a combination of a number of factors that might be contributing to speed up the countdown to D-Day and these factors include the pandemic, the energy crisis and the return of threats to global stability. The worst contributing factor, if not the main one, is the degeneration of liberal democracies and the proliferation of false republics.
The armageddon that I speak of is inflation. Not to be confused with a simple rise in prices, it is a possible breaking point, a crisis moment that will force a shift in the social paradigm.
Malta has already begun to feel the rumblings of the storm. Unable to operate in a vacuum the dangers of rising prices, increased energy bills and a general devaluation of the money in people’s pockets would spell disaster even in the case of a diligent government trying to navigate through the latest international crisis.
We have been there before. In 2008 the Gonzi government did manage to cushion the impact of a global financial crisis. Which did not mean that we did not emerge with a disgruntled business class. This time round we would do well to harbour strong doubts with regards to the capability of the Abela government to weather such a storm.
Here lies the problem. The Abela government inherited a system of governance that had already compromised the real republican constitution. An all-powerful executive hijacked the remaining pillars of the constitutional checks and balance denuding the system of any semblance of a republican charter based on the rule of law.
The compromised state is unable to generate any kind of policy beyond the populistic and is only able to plunder public funds for the benefit of the select few. The power of incumbency is used to maintain an illusion of normality notwithstanding the imminent signs of economic and social disaster.
Take the latest measure announced of distributing 200 or 100 euro cheques as one-off compensation for the damage caused by the pandemic. At an estimated 70 million euros this measure falls far short of creating a clear far-sighted policy to weather the impact of the incoming storm. Instead it is a temporary distraction for the population.
What we are facing is a collapse in living standards. The price hike will be the last thing on our minds compared to the devaluation of take-home pay, rising energy bills and rising cost of living. There will be a limit to the number of times the government chooses to plunder public money.
The real question is: how long before the anger spills to the streets? How long before partisan loyalty no longer suffices to blindfold citizens from the real effects of a faltering economy? How long before they realise that the institutional rape of our state has left our country exposed to the elements?
